ScanSource Plans Microsoft CSP Assault With intY Acquisition

The acquisition of U.K.-based intY will give ScanSource its first platform for bringing cloud services and Microsoft licenses to its channel partners, including its MSP and telecom solution providers and agents.

ScanSource on Monday said it has closed its previously unannounced acquisition of intY, a U.K.-based distributor of cloud services, and as a result is ready to take on entrenched competitors in the business of distributing cloud services, particularly those of Microsoft.

No financial details were released about the acquisition.

With the acquisition, ScanSource is getting a major cloud services platform as well as a Microsoft indirect license business in the U.K., the European Union, and the U.S., said Mark Morgan, senior executive vice president for corporate development for the Greenville, S.C.-based distributor.

intY offers two-tier distribution of cloud services from such vendors as Microsoft, Acronis, and Symantec. The Bristol, U.K.-based company also brings its Cascade self-service portal and is own cloud marketplace to ScanSource.

[Related: CRN Exclusive: ScanSource CEO On How Consolidation Is Impacting Distribution]

"This is ScanSource's first time with Microsoft's cloud suite and licensing," Morgan told CRN. "We've had a long-time relationship with Microsoft with Skype and Teams. We've been big on Microsoft's collaboration tools. But this the first for use in terms of Microsoft CSP licenses."

Those licensing capabilities include Microsoft's office 365, Azure Stack, Microsoft Dynamics, and Microsoft Enterprise Mobility + Security, said intY CEO Craig Joseph.

"This is important for ScanSource," Morgan said. "In the past four years, we've been building tools to give partners the ability to offer more complete solutions. And our partners are moving to the cloud services model, and the recurring revenue model. So this is very important."

Joseph told CRN that intY currently competes in North American in the cloud services market with such stalwarts as Ingram Micro, Tech Data, Arrow, and Pax8.

While that does open ScanSource to new competitive fronts, the last few years have proven that there is relatively little overlap between ScanSource and those competitors in cloud services, Morgan said.

"These are not the same partners that we compete for with broadline distributors," he said. "The majority of our partners in the U.S. have been mainly on the edge. We now have an opportunity to sell them services. They are looking at how to provide services and how to get recurring revenue."

In this area, the intY acquisition will fit nicely with ScanSource's 2016 acquisition of Intelisys, which brought the distributor a strong agent and telecom business, Morgan said.

"Our Intelisys business has a strong line card with a rich group of suppliers selling through the agent models, including MSPs and telecoms," he said. "Those partners are selling more and more cloud services. This is a great opportunity for our partners."

Joseph said he will remain CEO of intY, which going forward will be known as "intY, a ScanSource company." He said all intY's personnel are staying with the company after the acquisition.

The acquisition by ScanSource will make a big difference in terms of its reach, Joseph said. "We're wrapping ScanSource's scale around intY to give us a deeper breadth and reach," he said.